NATONAL GRAINS AUTHORITY vs IAC

FACTS:

National Grains Authority (now National Food Authority, NFA) is a government

agency created under PD 4. One of its incidental functions is the buying of
palay grains from qualified farmers. On 23 August 1979, Leon Soriano offered
to sell palay grains to the NFA, through the Provincial Manager (William Cabal)
of NFA in Tuguegarao, Cagayan.

He submitted the documents required by the NFA for pre-qualifying as a seller,

which were processed and accordingly, he was given a quota of 2,640 cavans of
palay. The quota noted in the Farmer’s Information Sheet represented the
maximum number of cavans of palay that Soriano may sell to the NFA. On 23
and 24 August 1979, Soriano delivered 630 cavans of palay. The palay
delivered were not rebagged, classified and weighed.

When Soriano demanded payment of the 630 cavans of palay, he was informed
that its payment will beheld in abeyance since Mr. Cabal was still investigating
on an information he received that Soriano was not a bona fide farmer and the
palay delivered by him was not produced from his farmland but was taken from
the warehouse of a rice trader, Ben de Guzman. On 28 August 1979, Cabal
wrote Soriano advising him to withdraw from the NFA warehouse the 630
cavans stating that NFA cannot legally accept the said delivery on the basis of
the subsequent certification of the BAEX technician (Napoleon Callangan) that
Soriano is not a bona fide farmer.

Instead of withdrawing the 630 cavans of palay, Soriano insisted that the palay
grains delivered be paid. He then filed a complaint for specific performance
and/or collection of money with damages on 2 November 1979, against the
NFA and William Cabal (Civil Case 2754). Meanwhile, by agreement of the
parties and upon order of the trial court, the 630 cavans of palay in question
were withdrawn from the warehouse of NFA. On 30 September 1982,

the trial court found Soriano a bona fide farmer and rendered judgment
ordering the NFA, its officers and agents to pay Soriano the amount of
P47,250.00 representing the unpaid price of the 630 cavans of palay plus legal
interest thereof (12% per annum, from the filing of complaint on 20
November1979 until fully paid). NFA and Cabal filed a motion for
reconsideration, which was denied by the court on 6 December 1982.

1
Appeal was filed with the Intermediate Appellate Court. On 23 December 1986,
the then IAC upheld the findings of the trialc ourt and affirmed the decision
ordering NFA and its officers to pay Soriano the price of the 630 cavans of rice
plus interest.

The motion for reconsideration of the appellate court’s decision was denied in a
resolution dated 17 April 1986. Hence, the present petition for review with the
sole issue of whether or not there was a contract of sale in the present case.

ISSUE: Whether there was a perfected sale

HELD:

Soriano initially offered to sell palay grains produced in his farmland to NFA.
When the latter accepted the offer by noting in Soriano's Farmer's Information
Sheet a quota of 2,640 cavans, there was already a meeting of the minds
between the parties. The object of the contract, being the palay grains
produced in Soriano's farmland and the NFA was to pay the same depending
upon its quality.

The fact that the exact number of cavans of palay to be delivered has not been
determined does not affect the perfection of the contract.

Article 1349 of the New Civil Code provides: ".The fact that the quantity is not
determinate shall not be an obstacle to the existence of the contract, provided
it is possible to determine the same, without the need of a new contract
between the parties.

" In this case, there was no need for NFA and Soriano to enter into a new
contract to determine the exact number of cavans of palay to be sold. Soriano
can deliver so much of his produce as long as it does not exceed 2,640 cavans.

From the moment the contract of sale is perfected, it is incumbent upon the
parties to comply with their mutual obligations or "the parties may reciprocally
demand performance" thereof.

The Supreme Court dismissed the instant petition for review, and affirmed the
assailed decision of the then IAC (now Court of Appeals) is affirmed; without
costs.